Shareholder Value Theory: Social Responsibility Can Increase ROI

Friedman begrudgingly admits that “social responsibility” and business practices that eventually increase share price sometimes align. “… it may well be that in the long-run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community… That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses…” He then goes on to label these moves “hypocritical window-dressing because it harms the foundations of a free society.” He backs off telling companies to avoid these moves because “that would be to call on them to exercise a ‘social responsibility!’”